FT124: “Liberals use the courts to give them what the people won’t.” -Old Pithy

Posted by PITHOCRATES - June 29th, 2012

Fundamental Truth

Magna Carta led to Constitutional Monarchy and Representative Government

Medieval kings liked doing as they pleased.  From living well.  To expanding their kingdoms by force.  Or trying to.  As kingdoms got larger, though, this was more difficult to do.  Because the larger the kingdom got the more food they had to produce.  And kings didn’t feed their kingdoms from their castle vegetable gardens.  They needed the wealthy and powerful landowners.  Who owned the land.  Grew the food.  And provided the kingdom’s wealth.

These landowners made land valuable.  By growing food on it.  As famine was no stranger during the Middle Ages there was nothing more important than growing food.  Those who did became wealthy.  And their estates became mini kingdoms.  With lots of peasants working the fields.  And lots of soldiers to defend their land.  And to fight for their king in times of war.  Kings needed to maintain good relationships with these wealthy landowners.  To keep them supporting their kingdoms.  And to prevent any one of them from rising up and challenging the king for his throne.

King John of England was hurting his relationships with the wealthy landowners.  He fought a lot of expensive wars across the English Channel in France.  Which required high taxes on the English landowners.  The barons.  Worse, King John lost a lot of his battles in France.  Losing the barons some of their Normandy lands.  So the barons were becoming a little disgruntled with their king.  And they rebelled.  Eventually forcing the king to place his Great Seal on Magna Carta.  Limiting his powers.  It didn’t change things much at the time.  But it would lead to constitutional monarchy.  And representative government.

The Patriots of 1776 were none too keen on Creating a New Central Power

Kings don’t like limits on their power.  King John would go on to renounce Magna Carta.  And got the Pope’s approval to not honor the promises he made with the barons.  But these barons sowed the seeds of representative government in England.  And the Western World.  Greatly influencing the Founding Fathers in America.  Whose Constitution placed great limits on the government’s power.

The Americans were having some problems with their Articles of Confederation.  The sovereign states were taking care of themselves.  Sometimes at the expense of the other states.  Or the new nation.  And the new nation wasn’t making much progress in the international community.  A bit of a laughing stock to other nations.  Who were all sure it was only a matter of time before the American colonies would be British again.  For once the war was over there was little united about the states anymore.  So James Madison urged a meeting of the several states to revise the Articles of Confederation.  To help make a more perfect union.  And to move the new nation forward.  They met in Philadelphia in 1787.  And caused a firestorm.  For they didn’t revise the Articles.  They threw them away.  And wrote a brand new Constitution.

This inflamed a lot of the Patriots of 1776.  Who had voted to sever the bonds from a distant central power about a decade earlier.  And they were none too keen on creating a new central power to replace the one they just banished.  It took awhile but with the presence of George Washington and some words from Benjamin Franklin, two of the most trusted and experienced Americans who sacrificed a lot in securing their independence, they completed their task.  It wasn’t a perfect document.  But it was the best they were ever going to produce considering the sectional differences in the country.  And they sent it to the states for ratification.  James Madison, Alexander Hamilton and John Jay helped to secure ratification by writing a series of articles that we know today as the Federalist Papers.  Some of the finest Constitutional scholarship ever written.

As Few as Five People in Black Robes can Fundamentally Change the Nation

Key to the Constitution was the separation of powers that restricted the power of the new federal government that no one trusted.  There was a legislature to write law.  An executive branch to enforce law.  And a judicial branch to interpret law.  To make sure that the other two branches did not violate the Constitution.  Such a system would have really crimped King John’s style.  For the law was above all the people.  Including the executive.  He could only do the things the laws allowed him to do.  And the things the laws allowed him to do he could only do if the legislature agreed to pay for them.  It was a system of checks and balances that helped the nation to grow while maintaining personal liberty.

King John would have been particularly irked by the legislature.  Made up by representatives of the people.  Who enacted legislation that was in the best interest of the people.  Not him.  Fast forward to modern times and you find history littered with people who wanted to expand their power only to have that representative body of the people foil them.  Ruling elites.  Modern aristocrats.  Those who feel an entitlement due to a superior education.  A superior bloodline.  Or simply like-minded people who would rather have the days of unlimited power like they had in Medieval Europe.  Before the barons had to muck up the works with Magna Carta.

Over time they learned how to bring back some of the old ways.  The easiest way was just to get people to vote for them.  And they did this by giving them a lot of free stuff.  But there were some things that they just couldn’t bribe out of the people.  So they turned to the courts.  And did a little legislating with activist judges.  Sometimes bringing a suit all the way to the Supreme Court to create a law where there was no law.  Abortion is now legal even though there was never any federal legislation addressing it.  While there was plenty of state legislation forbidding it.  Until seven men in black robes overruled the will of the people in those states.

The Supreme Court is powerful.  For as few as five people in black robes can fundamentally change the nation.  Which is why presidential elections are so important.  Because presidents nominate judges to the Supreme Court.  And those on the Left depend on the timely deaths and/or retirements of Supreme Court judges so they can nominate activist judges.  To get a majority on the high court to rule in their favor on bad law.  Such as Obamacare.  An unpopular law.  A law the majority of the people want repealed.  A law that became law only with subterfuge (the mandate is not a tax).  A law that clearly violated the Constitution (forcing people to buy something).  Yet five people in black robes just fundamentally changed the nation by voting that Obamacare was Constitutional (the mandate is a tax).  Which just goes to show you that where there is a will there is a way.  A way to rule like a king.  Against the will of the people.



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Continental Army, Continental Congress, Inflation, Wage & Price Controls, Paper Money, Specie, IOUs, Impressment and Repudiation

Posted by PITHOCRATES - May 3rd, 2012

Politics 101

The Articles of Confederation made the United States of America a Confederacy of Sovereign States that had Little Power to Raise Revenue

By the time the Continental Army left Valley Forge they could hold their own against the British Army.  The British couldn’t push them around any longer.  They became so good that they fought the war to a standstill.  They came close to some major wins on the field of battle.  But close didn’t diminish the staying power of the British Army.  And they stayed.  On the battlefield.  And in their cities.  Dragging the conflict out for a total of 8 years.  And no matter what era of warfare you use to measure war-years 8 years of war is very costly.  Someone has to pay for it.  And, ultimately, it’s the people.  Either through taxation.  Or the loss of wealth through inflation.  Or simply the loss of wealth through the losing of your stuff.  And going without.  Because the army fighting for your liberty had no choice but to take what was yours.

This made the Revolutionary War unlike other wars.  For this war was about liberty.  Property rights.  The tyranny of a distant power.  And unjust taxation.  In other words this war was against all the things that made fighting a war possible.  You can’t really draft men to fight in a country that stands for liberty.  You just can’t confiscate the things you need to wage war from your people in a country built upon the principle of property rights.  You can’t declare martial law and suspend the rule of law on people you deem not to be patriotic enough in supporting the cause when you’re fighting the tyranny of a distant power that does.  (Even the Americans gave British soldiers a fair trial for the Boston Massacre).  And taxes?  The people that dumped tea into Boston Harbor over the principle of no taxation for revenue purposes without representation in Parliament was not going to be able to tax their people on a federal level.  Which proved a big obstacle in paying for the war to win their liberty.

The Articles of Confederation made the United States of America a confederacy of sovereign states.  And those sovereign states held the real power.  Virginia.  Massachusetts.  Pennsylvania.  New York.  And the other 9 sovereign states.  Not the United States of America.  That confederation that was waging war against the mightiest power in the world.  Which made raising funds difficult.  For without the power to levy taxes all they could do was ask.  Just like George Washington did all of the time.  Especially during that horrible winter at Valley Forge when his army was naked and starving.  He asked the Continental Congress for provisions.  And the Continental Congress asked the several states for their apportioned funds raised by their state legislatures.  Per the Articles of Confederation.  If they didn’t pay these funds timely or in full (or at all) they could ask again.  And that’s all they could do.  Which is why George Washington’s army suffered through that horrible winter.  Because the funds weren’t there to buy Washington the provisions his army needed.

Thanks to Inflation the Continental Army often had No Choice but to Take what they Needed from the People they were Fighting For 

The Americans never had enough money.  Which makes it amazing that they held off losing for 8 years.  Eight very costly years.  And won.  Especially considering how bad the economy was during the war.  Unable to tax or get sufficient loans from Europe they had little choice but to print money.  Which caused a whole lot of trouble.  For the more money they printed and put into circulation the more the value of their currency fell.  And soon a Continental was “not worth a Continental.”  And when the currency lost its value it took more of it to buy things.  Which led to price inflation.  The price of material and parts grew so high that it increased the cost of American manufactured muskets over the cost of imported French muskets.  Which they had to bring in through a British blockade.  Giving what should have been a cost advantage to the Americans.  Had it not been for the inflation.

To try and keep prices under control they implemented wage and price controls.  Which didn’t work.  The continued devaluation of the currency forced sellers to raise their prices to cover their rising costs.  Forcing them to sell below their costs would just put them out of business.  Voluntarily.  Or involuntarily.  Creating shortages in the market place.  Some offered lower prices for specie (gold and silver coins).  You can’t print hard money (specie).  So it held its value.  Unlike the paper money.  So a little of specie went a long way compared to paper money.  Of course, this didn’t help their wage and price controls.  It just made the paper more worthless.  And raised prices further.

There was yet another ugly side to this sordid business.  High prices and shortages created opportunity to profit handsomely.  There was speculation and market manipulation (hoarding, cornering the market, etc.) to take advantage of those highly priced items that were in scare supply.  Further raising prices for the people.  And compounding the problems of provisioning the army.  Which infuriated the low-paid soldiers.  Who the Continental Congress paid in that worthless paper money.  Angry mobs arose to address this profiteering.  As well as new laws and enforcement.  But they helped little.  The army often had no choice but to take what they needed from the people they were fighting for.  Either outright.  Or in exchange for IOUs.   Promises that the Continental Congress of the United States of America would make good on.  Just as soon as the several states paid their apportioned funds raised by their state legislatures. 

If you Violate the Ideals you’re Fighting for while Fighting for those Ideals it can Complicate the Peace

Fighting for an ideal makes war complicated.  If you’re just a tyrannical dictator looking to rape and pillage it makes things easier.  You don’t have to worry about liberty.  Property rights.  Debt.  Or taxes.  In the short term.  Or the long term.  Which made the American Revolutionary War a very difficult war to fight.  Because at the heart of the United States of America were those ideals.  To win this war to grant liberty to the people required taking their liberty away.  A little.  To win this war to guarantee property rights you had to violate property rights.  A little.  To win this war against tyranny you had to use excessive force against your people.  A little.  To win this war to establish taxation only with representation caused the destruction or personal wealth.  A lot.  Through impressment (taking things from the people).  Borrowing from foreign countries.  Or through inflation.

When the French joined the Americans in 1778 inflation was already out of control.  They printed twice as many Continentals in 1778 as they did in the last three years combined.  And there was serious discussion about doing the unthinkable.  Repudiation.  To simply escape the inflation by escaping the currency.  To retire the bills from circulation.  At a fraction of their value.  And that’s what they did in 1780.  Issuing new currency based on specie for the old currency at a 40 to one ratio.  The states were to tax their people to raise the funds for the new currency.  So the people took a huge short-term loss.  For a stable long-term future.  Based on specie.  That they couldn’t inflate.  This hard money would come from in large part the Spanish and the French.  The Spanish in Cuba buying American flour with specie.  And French aid.  As well as their army and navy spending their hard money in the American economy.

Wars are costly.  And they are rarely nice.  Trying to make them nice can make them last longer.  Which will make them more costly.  Of course, if you violate the ideals you’re fighting for while fighting for those ideals it can complicate the peace.  Luckily, for the Americans, they won their peace.  Their allies, the French, were not so lucky in their revolution.  The French Revolution.  Fought less than a decade after the American Revolution came to a close.  And unlike the Americans the French peace that followed was a bloody one.  That would eventually replace the king they executed with an emperor.  Napoleon Bonaparte.  Who the Americans helped bring to power in part due to the crushing debt King Louis XVI incurred supporting the Americans in their revolution.



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Study finds that the Liberal Policies Like that Favored by President Obama make People Unhappy

Posted by PITHOCRATES - April 8th, 2012

Week in Review

Money can’t buy happiness.  A new study proves it.  For it’s not buying the richest country in the world happiness.  So there is something else apparently that leads to a people’s happiness (see Canada among the happiest countries in the world by Tavia Grant posted 4/2/2012 on The Globe and Mail).

It finds the world has, broadly speaking, become a “little happier” in the past three decades, as living standards have risen. (One exception is the United States, where life satisfaction has not improved).

Interesting.  Life satisfaction in America hasn’t improved.  I wonder why.  And what are the things that make people more satisfied in life.  Here are some of those things according to this study.

•Happier countries tend to be richer ones. But more important for happiness than income are social factors like the strength of social support, the absence of corruption and the degree of personal freedom.

•Unemployment causes as much unhappiness as bereavement or separation. At work, job security and good relationships do more for job satisfaction than high pay and convenient hours.

•Behaving well makes people happier.

•Mental health is the biggest single factor affecting happiness in any country. Yet only a quarter of mentally ill people get treatment for their condition in advanced countries and fewer still in poorer countries.

•Stable family life and enduring marriages are important for the happiness of parents and children.

•In advanced countries, women are happier than men, while the position in poorer countries is mixed.

•Happiness is lowest in middle age.

Liberal Democrats are all for bigger government.  Continuously raising taxes to pay for it.  The federal budget has exploded as a result.  As has the debt.  For despite the vast wealth they’re taxing out of the private sector it isn’t enough.  And as it is anywhere where people manage large piles of money there is corruption.  The bigger the pile the bigger the corruption.  And so it is with government.  Just look at the billions thrown away on pork barrel spending on worthless projects like the Murtha Airport.  This kind of out of control corrupt pork barrel spending makes people unhappy.  Apparently they would be happier with a government that lives responsibly within their means like they have to.  At least, according to this study.

High taxes and onerous regulatory compliance costs are squeezing small business.  Millionaire entrepreneurs of yesteryear say they couldn’t do what they did today.  The explosion in new regulatory law just squashes innovation.  It’s simply too costly and too complicated to go into business.  There are so many laws that it impossible to know them all.  Unless you’re a lawyer.  And lawyers are about the only ones who understand these laws.  Or, at least, understand them enough.  So they can sue any business for violating some obscure law the business owner is unaware of.  And they do this all the time.  It’s legal extortion.  For business owners find it cheaper to settle out of court just to make the lawyers go away.  As a result this active interventionist government pushed by liberal Democrats is a drag on job creation.  Whose answer is more benefits for the unemployed rather than helping the job creators.  This tenuous job environment makes workers feel less secure in their own jobs.  And less happy.  According to this study.

Liberals attack religion and their moralizing.  They attack conservatives and their moralizing.  Liberals instead prefer fewer restraints placed on life.  For who is to say what is right and wrong?  So they favor relaxed drug laws.  Free contraceptives.  Abortion on demand.  And as much consequence-free fun as they can have.  In public places.  And in quiet neighborhoods.  Where property damage is just kids blowing off a little steam.  I mean, who hasn’t done a donut on a neighbor’s lawn because they told them to be quiet at 2 in the morning?  Well it turns out people prefer having quiet church-going people for neighbors.  Who treat people with respect and behave well when in public.  These are the people that make other people happy.  According to this study, at least.

LBJ was a big liberal Democrat.  His Great Society was a bonanza of welfare benefits for the poor.  Especially for single mothers.  The government said to these single moms, “Look, you don’t need a husband in your life.  We will provide for you and your children.  We’ll even provide public housing for you to live in.  So you don’t need a husband.  And your children don’t need a father.  We can be all of that for you.”  Well, the worse place to live was in public housing during the Seventies.  Where crime and drugs use was rampant.  With no stable family structure kids of single parents turned to the street.  And crime.  Taking that behavior into their schools.  Spreading the trouble.  Having the government take over the role of family was like introducing a cancer into a healthy being.  And it spreads still to this day.  The idea that family isn’t important.  And that government can provide.  But more government has only made people less happy.  At least, according to this study.

The policies of liberal Democrats encourage irresponsible behavior.  Consequence-free fun.  They’ve attacked religion and tried to remove it from everyday life.  To the point that people today have very little if any moral compass.  Young women have babies out of wedlock.  Some of these mothers sacrifice everything in a herculean struggle to raise their children.  Working and sacrificing everything for their children.  Even a happy family life with a husband and father that would have made children rearing easier.  Some single mothers are superheroes.  Some are not.  And neither as are happy as a family with two parents providing for and nurturing their children.  And having time to spend with them in their childhood because they’re not working a second or third job.

So this is why America has not improved in the area of life satisfaction.  Because of the extraordinary growth of liberal Democrat policies.  The very things that lead people to be less happy.  At least, according to this new study.



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British Corn Laws and Empire, the U.S. Free Trade Zone and the Eurozone

Posted by PITHOCRATES - November 29th, 2011

History 101

With the Royal Navy, the Steamship, the Railroad and the Telegraph, Great Britain Peacefully Ruled and Led the World

The British Corn Laws were on the books from 1815 to 1846.  To protect domestic cereal farmers from less expensive food imports.  By adding a tariff to these grain imports.  Increasing their price.  So they weren’t any cheaper than the domestically grown grain.  Interestingly it was the few great landowners who wanted these tariffs.  Not the people who had to buy the food.  For paying more for food meant they had less to spend on clothing and other things.

When it came to consumer prices the people were always for free trade.  Because whatever they earned it never seemed enough.  So paying more in taxes was never a good thing.  These wealthy landowners even put forth the argument that paying higher food prices meant higher wages.  In a feeble attempt to maintain these tariffs.  They said that manufacturers just wanted cheaper food so they could pay cheaper wages.  Because if food wasn’t that expensive their workers wouldn’t need as much pay.  And, of course, the greedy manufacturers would just pocket more profits.  Much like the greedy landowners were doing thanks to the Corn Laws.  But their greed was somehow different.

Well, free trade won out.  Eventually.  And they repealed the Corn Laws in 1846.  And, as expected, food prices plummeted.  Soon they imported more food than they grew.  Because it was cheaper.  And it freed up more money for use elsewhere in the economy.  Stimulating innovation and invention.  Taking the Industrial Revolution to new heights.  And raising the standard of living for all people.  Not just the wealthy landowners.  The British Empire reached its zenith in the 19th century.  After the defeat of Napoleon there was about a century of peace called the Pax Britannica.  Where Great Britain became the global policeman.  With the Royal Navy, the steamship, the railroad and the telegraph, Great Britain peacefully ruled and led the world.

The U.S. was a Large Free Trade Zone with a Common Currency, Language, People and Customs

The British were the most advanced nation in the 19th century world.  And the richest.  Her empire dominated trade.  Her rule of law and common currency made that trade efficient.  It was a giant free trade zone within her empire.  But it couldn’t last.  The cost of maintaining the empire, plus a world war, was just too much.  Her economic might faded.  While another rose.  In a former colony.  The United States.

The sun never set on the British Empire.  Because it was that big.  Reaching around the globe.  Connected by long lines of communication.  And an imperial British culture uniting different peoples.   Who knew different cultures, laws and money.  Whereas as the United States had all the advantages of empire (size and range of resources) without any of the disadvantages.  The U.S. was a large free trade zone with a common currency, language, people and customs.  The states comprising the U.S. were as big as countries in other parts of the world.  But trade could flow between any two states without custom duties, tariffs or even inspections.  It was truly free.

When the Industrial Revolution reached the United States, the economy took off and never looked back.  By the end of the 19th century she was challenging the British Empire.  And rapidly overtook her.  There was another global policeman in town.  All because of a giant free trade zone that was as big as a continent.

The ‘United States’ of Europe created the Eurozone and a Common Currency (the Euro) to Compete with the U.S.

The United States is such the perfect model of free market capitalism that Europe created the Eurozone and a common currency (the Euro) to compete with the U.S.  And it worked.  For awhile.

The ‘united states’ of Europe as a whole has a larger economy than the U.S.  But they have their problems.  For a common currency is only part of America’s success.  The U.S. is a united federation of states with one set of federal laws, language and culture for interstate commerce.  Something Europe doesn’t have.  And probably never will.  European countries have far too much history and culture.  And nationalism.  They will never unite politically.  Like the United States.  Or the British Empire, for that matter.

The key to the British Empire was that it was British.  One currency.  One language.  One set of laws.  One culture.  For interstate trade, at least.  Just like in the country that surpassed her.  The United States.  Still, there’s nothing wrong with being a smaller economic power than the U.S.  As long as you have free trade your people can enjoy a high standard of living.  Without the added responsibility of being the global policeman.



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Rule of Law

Posted by PITHOCRATES - November 21st, 2011

Economics 101

To take Civilization to the Next Level required the Rule of Law

Agriculture advances gave us food surpluses.  Food surpluses gave us a division of labor.  The division of labor gave us trade.  Money made that trade more efficient.  And religion allowed great gatherings of people to live together in urban settings.  Which was a start.  But it didn’t solve all the ills of packing a lot of people together in a crowded urban setting.

Religion did bring people together.  But organized civilization needs leadership.  And having a leadership position over the masses gives one great powers.  For good.  As well as bad.  And all too often leaders have become intoxicated on that power.  Especially if that leader was also the god that the people worshipped.  Who felt they could do anything they wanted.  To anyone they wanted.  And often did.

But it’s just not leaders who failed to choose good.  A lot of the people did, too.  Some people cheated each other.  Stole from each other.  Didn’t honor their agreements.  Fights broke out.  Some harmed others.  Even killed people.  Clearly, religion alone wasn’t enough to get everyone to live in peace and harmony.  They needed something more.  Some basic ground rules.  Rules of the game.  The game being living together in a crowded urban setting.  Working together.  And entering into economic transactions.  What they needed to take civilization to the next level was the Rule of Law.

We use the Rule of Law to Clearly Identify and Protect our Private Property

The key for economic development rested on the principle of private property.  Economic activity is based on trade.  To trade you need first to create things to trade.  Often requiring costs and great personal effort to create these things.  Which people will gladly undertake.  As long as if they own what they create.  And are free to do whatever they wish with it.  Keep it.  Use it.  Or trade it.

We use the Rule of Law to clearly identify and protect our private property.  We define what is ours.  And forbid others to take what is ours without our consent.  If they do they will be punished under the law.  Which will deter some.  And those undeterred will face the consequences.  Thus producing a safer environment to live in.  Where we are safe in our persons and property.  Especially in crowded urban settings.

This encouraged greater economic activity.  With more opportunity to trade.  Sometimes we didn’t exchange things after concluding our negotiations.  Instead entering into a contract for an economic exchange.  Such as summarizing the terms for the exchange of a piece of land.  Or for a future farm crop.  Agreements we freely and consensually enter into.  Because we trust the Rule of Law to protect and enforce these agreements.

Private Property Rights and Contracts are the Indispensible Requirements of any Free Market Economy

The Rule of Law picked up where religion left off.  For those who did not wish to choose good behavior.  Whether it be people in the masses.  Or the leaders.  The Rule of Law became supreme.  Everyone was answerable to the laws of the land.  Today, government leaders often swear an oath to support and defend these laws.

And by clearly setting the ground rules for economic exchange, the Rule of Law unleashed economic activity.  Perhaps more so than any other thing.  By establishing private property rights.  And creating contracts.  The indispensible requirements of any free market economy.



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